BlackRock Earnings Rise as Assets Surpass a Milestone
October 18 2016 - 7:50AM
Dow Jones News
BlackRock Inc. said Tuesday that it had $5.12 trillion in assets
under management, marking a fresh high for a company that has been
a main beneficiary of investors' growing appetites for passive
investing.
Profit for the firm rose as AUM climbed by 13.6% from a year
ago, but revenue fell as performance fees decreased.
BlackRock's path to $5 trillion began in 1988, when the firm
started as a fixed-income specialist as part of The Blackstone
Group in a single Park Avenue office. By 1999, when the money
manager went public, it had gathered $165 billion in assets.
A series of canny deals in the mid to late-2000s added to its
heft and its mix of businesses. The firm bought Merrill Lynch
Investment Managers in 2006, a transaction that helped it expand
globally and bolster its stock picking and multiasset businesses.
The deal boosted BlackRock's assets under management to about $1
trillion for the first time.
Then, in 2009 with $1.3 trillion in assets, it acquired Barclays
Global Investors, gaining a large exchange-traded fund business
that helped it turn iShares into the world's largest ETF business.
Assets under management more than doubled to more than $2.7
trillion as a result of the deal.
Since then, the firm has worked to grow that passive-investing
unit, gather assets globally, bolster its alternatives platform and
gain more retail assets. It passed the $4 trillion mark in late
2013.
During the quarter, the New York firm reported $55 billion in
long-term net inflows during the September quarter with inflows
coming across asset classes.
The inflows and positive market performance helped boost assets
under management.
The firm reported that equity offerings lead grow in its iShares
products, leading to $51.3 billion of long term net iShares
inflows. In the iShares division, which makes up about a quarter of
BlackRock's assets under management, the firm offers
exchange-traded funds, or securities that trade on an exchange and
typically track an index or other basket of assets.
Even as BlackRock has worked to woo and retain retail clients,
those clients pulled a net $2.2 billion from the firm in the
quarter.
In all, BlackRock reported a profit of $875 million, up from
$843 million a year prior. Per-share earnings grew to $5.26 from
$5.00. Excluding certain items, BlackRock earned $5.14 a share, up
from $5.00 a year earlier.
Revenue fell 2.5% to $2.84 billion.
Analysts had projected $5.00 a share in adjusted earnings on
$2.88 billion in revenue, according to Thomson Reuters.
BlackRock shares, down 0.9% in the last three months, were
inactive in premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com and Sarah
Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
October 18, 2016 07:35 ET (11:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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